by Rhodri C. Williams
The NY Times this morning has picked up an interesting story on a mysterious but extensive sale of state assets underway in Myanmar (Burma). The items on the block run the gamut from the national airline, mines, farmland and factories to health and education facilities. The Times notes that many of the deals seem to have been wrapped up with the existing regime-friendly oligarchs and the military and that the proceeds are likely to aid the current regime’s upcoming election campaign; splashing out can presumably help the incumbents win the 26% of seats they will need, on top of the 25% they have constitutionally reserved for themselves, in order to rule the country.
Nevertheless, the relinquishment of direct state control over many of the means of production is seen as a potentially positive step toward a more liberal variant of ‘managed democracy’:
… the privatizations could also have the effect of injecting some competition into what is an almost Soviet-style economic system, and some analysts here say they may herald a shift in direction. Reformers in the government, they say, may be hoping to follow a path similar to that of China or Vietnam, where the economies have been liberalized but the ruling party has remained firmly in charge and has tolerated little dissent.
Sadly, invoking even the unapologetically authoritarian regimes in China and Vietnam may be setting the bar a bit high. Another viable model in southeast Asia may be Cambodia, where the destruction of both traditional and modern institutions under the Khmer Rouge regime has been followed by an astonishing thirty year run in power by the regime – and the man, Prime Minister Hun Sen – installed by the Vietnamese after their 1979 incursion.
As described in my 2008 report for COHRE, as well as by many other observers, Hun Sen has been incredibly astute at drawing on Cambodia’s historical tradition of patronage in order to shore up political loyalties based on debt and revenue streams while donning and doffing political ideologies as necessary to maximize international support.
Notably in analyzing Burma, Hun Sen was early out in privatizing land, not only because he saw which way the wind was blowing in the late 1980s, but also because it allowed him to lock in this valuable asset for his supporters and exclude restitution claims by the 300,000 exiles in neighboring Thailand, with whom he could reasonably suspect he would soon be forced to come to some type of political settlement.
Since the peace agreement in 1991, the regime has continued to treat the country’s land resources as a slush fund, resulting in the widespread grant of dubious concessions, land-grabbing, speculation and ultimately flight to wretched urban informal settlements for many of the country’s hard-pressed rural majority. Land has remained such an issue that it has not infrequently been invoked as Cambodia’s number one human rights problem – an impressive achievement considering that the competition includes the muzzling of press freedoms, arbitrary arrests and detention and a tradition of discouraging the political opposition that began spectacularly in 1997 with Hun Sen’s party killing or exiling most of the high-ranking members of its main coalition partner.
The rate at which the Hun Sen regime has continued to “eat the country” (in a local phrase describing patronage behavior that will be eerily familiar to Kenya observers) appears to have accelerated recently in light of at least two developments. First, an increasing amount of Cambodia’s development aid is now coming from China. Where the West has traditionally encumbered their extensive support to the Cambodian budget with troublesome (if relatively easily circumvented) human rights demands, China has been more laissez faire in attaching conditions to its investments. Indeed, the relatively superficial impact of three decades of Western human rights evangelism was recently laid painfully bare when China used its influence to secure the refoulement of twenty ethnic Uighurs who had sought asylum in Cambodia. The UNHCR, which had previously viewed Cambodia as “a refugee model for southeast Asia“, sent personnel to the airport in vain to try to physically stop the deportation.
A second factor has been the global financial crisis and the accompanying trend toward the acquisition of land in developing countries by companies and governments of developed ones. Given the continued lack of rule of law and rent-seeking behavior of Cambodian officialdom, the Guardian’s spectacular assertion in April 2008 that foreign interests had been permitted to buy nearly half of the country’s territory was all too credible. Although Cambodia has subsequently moved toward more uniform regulation of foreign investment in land and property, concerns remain that this could be another instance of legislatively closing the barn doors after the horses have already bolted. Indeed, the recent discovery of oil reserves in Cambodia has highlighted the extent to which natural resources, like land, have been squandered for short term profit. Global Witness alleged in 2009 that
… rights to exploit oil and mineral resources have been allocated behind closed doors by a small number of powerbrokers surrounding the prime minister and other senior officials. The beneficiaries of many of these deals are members of the ruling elite or their family members. Meanwhile, millions of dollars paid by oil and mining companies to secure access to these resources appear to be missing from the national accounts.
Last week, Global Witness condemned a new wrinkle in Cambodia’s marriage of modern investment promotion and traditional predatory government behavior, namely the formation of forty-two “official partnerships” between private businesses and Cambodian military units. This program, apparently backed by Prime Minister Hun Sen, is described as effectively turning the military into a private security force available to the highest bidders:
“Yet again, Cambodia’s donors are being mocked by the government’s blatant violation of basic governance and transparency standards. The existence of a strong patronage system between the military and private business is not new. But what is different and shocking is that it has become official government policy,” said [GW Campaigns Director Gavin] Hayman. “Donors should send a firm and decisive message that Cambodia’s military exists to protect the people, not the financial assets of a privileged few.”
The World Bank has repeatedly noted that economic growth in Cambodia, while consistent and high over the last years, has tended to increase inequality. In a report last year, the Bank identified inequality as one of three “challenging areas for further analysis” along with urban management and environmental stress:
Various indicators show that inequality has indeed increased significantly over the past four years: such rapid increase in inequality is not only politically and socially undesirable, it also tends to be inimical to sustained rapid growth. (executive summary, xvi)
The Bank also noted in a report two years earlier that inequality was exacerbated by “increased concentration of land ownership, together with insecure land tenure” (executive summary, i). In a 2006 poverty assessment of Cambodia, the Bank noted that Cambodia’s inequality not only set it apart from other emerging economic powers in the region, but threatened the country’s potential to continue its post-Cold War growth spurt:
The experience of countries (e.g. Vietnam) which have created broad-based growth which includes the poor to a greater degree suggests also that such patterns of shared growth are more stable (and often higher) than growth patterns (such as that seen in Cambodia) which are based on a few enclave sectors and in which the benefits of growth accrue disproportionately to those who are already rich. (page 30)
Returning to Myanmar, one is left with the conclusion that the Vietnamese development path may would be highly desirable but may not be in the cards. For a regime that is hungry to remain in power, eager to consolidate conflict gains before engaging in political reconciliation, and now apparently willing to treat property it supposedly held in trust for the country as a means of securing short-term cash and political loyalty, the Cambodian development path appears a lot more likely.
And in a final touch of sad irony, the timing and circumstances of this belated economic ‘opening’ are such that it is likely to destroy one of the few potential assets accrued during the decades of dirigiste stagnation, namely preservation of a capital city in Asia that had remained beyond the reach of the wave of charmless high rise megalomania that had overtaken many of its peers. As reported by the Times:
In recent days, the country’s Privatization Commission produced a list of 176 assets in Yangon, the main city, to be auctioned off sometime over the next few weeks. The 18-page list, which was shown to prospective buyers, includes a wide-ranging roster of buildings in Yangon worth hundreds of millions of dollars.
The list, which covers only part of the privatization plan, features many former government offices, notably the lakeside office of the attorney general, the national archives, the auditor general’s headquarters, the archaeology department and the Ministry of Industry.
The buildings were abandoned when the capital was moved to the more remote location of Naypyidaw in 2005, and their sale would seem to ensure that the move was irreversible.
The businessman said it was likely that dozens of colonial-era buildings would be torn down. “I feel like I’m bleeding,” he said.
We can only hope that the decision to supplement bogus democratization with crony privatization does not leave Myanmar worse off than when it had neither.